Given below is a sample of questions in Purchasing that an SAP Retail consultant may ask the organization, prior to an implementation.
In addition to asking these questions and getting a direct Yes/No’ answer, I am of the opinion that the BPX should highlight the business benefits of activating specific functionalities. This may already be happening in many implementations, but I would like to reemphasize its importance. Yes/No’ answers may help in configuring the as is’ but may not activate functionalities that can make processes more efficient.
- Is your Purchasing Centralized or Decentralized or both?
- Have you currently identified purchasing groups/purchasing areas? If so, on what basis?
- Specify whether the following Purchasing Documents are maintained
- Purchase requisitions – Yes/No
- Request for quotations – Yes/No
- Quotations – Yes/No
- Purchase order – Yes/No.
- Contracts – Yes/No? If yes how are they maintained period/value specific
- Scheduling agreements (with delivery schedule) – Yes/No.
- Shipping Notifications – Yes/No
- Indicate Taxation, Excise, Customs procedure existing in your area / country?
- Do you have a mechanism to evaluate your vendors? If yes how?
- Do you have a quota arrangement for vendors? If yes, is it on value or on quantity basis?
- Do you have a system of purchase orders being automatically generated based on the requirements planning data?
- What are the different types of merchandise do you deal with for purchasing – e.g. trading goods, raw materials etc.? How are merchandise classified for procurement?
- Do you have any Sub-contracting arrangements/Rack jobbing/Third party orders?
- Do you to send reminders to vendors for variations in deliveries?
- Do you procure and sell services?
- What support do you get from your system for conducting negotiations with vendors? Do you wish to have additional information than what is currently available?
- Does your system propose vendors automatically? If so, how is the procurement quantity divided among the vendors?
- What are the release procedures for purchase requisitions / POs?
Some of the benefits the BPX should highlight are:
– Centralized purchasing gives organizations the benefits of attractive prices and incentives due to the economies of large scale buying. It also helps in controlling the buying process at a centralized location.
– The activity of purchasing itself is undertaken by Purchasing Groups, which can be grouped together to form Purchasing areas for statistical purposes. For example the Purchasing Area could be ‘Food’ and the Purchasing Groups could be ‘Dairy’ & ‘Non Dairy’. Master data is stored at Purchasing Organization level and the Purchasing Group and Purchasing Areas are used for reporting and evaluation.
– All the requirements planning, store order, allocation, promotion, and sales order functions in SAP Retail create order proposals for the stores, distribution centers, and customers. Usually, these order proposals are created as purchase requisitions, to which additional information, such as the vendor or delivery date, is added. This additional information is entered in the actual purchase order.
– Retailers must often distribute centrally procured merchandise among a large number of stores or other recipients. The Allocation component in SAP Retail enables the organization to plan a stock split and then trigger all the necessary goods movements. Allocation notifications ensure smooth and efficient communication between headquarters and the individual stores. Once it is planned and completed, the system can automatically trigger documents to procure or deliver the merchandise.
– The sources of supply for a particular article over a particular period can be stored in the source list, and if required one source can be flagged as preferred. The benefit is that when a purchase order is created, the system automatically enters the source of supply and determines a supply channel from the vendor through the distribution centers to the store. It also takes any existing outline agreements or quota arrangements into account.
– Once purchase requisitions have been matched up with a source of supply, the system can automatically convert them to purchase orders. This is possible for articles and vendors for which an indicator has been set in the master records allowing automatic ordering. The system then groups together all the items with the same purchasing organization and purchasing group for a particular vendor in the purchase order.
– When the value of an order is particularly high or if the goods are of a special nature, the organization may want to find the best possible vendor. The system enables the generation of requests for quotations from several vendors directly from purchase requisitions. The price comparison list can then be used to compare the prices and conditions quoted and then determine the best quotation.
– If a contract exists with a vendor, the system automatically suggests creating a contract release order. All these functions make entering orders considerably easier because only a minimum of additional information has to be entered manually. This also helps in maintaining the accuracy of data.
– The load building functions aggregate all the individual items in open purchase orders to optimize the loading capacity of a truck or a railcar. If the merchandise ordered does not fill a truck, the system analyzes future requirements over a period of time. Taking shelf life into account, it automatically suggests ordering larger quantities or additional merchandise to fill up the available loading space. Or, if the system calculates only a small load can be achieved and if the articles in question are not crucial to maintaining the required service level, the system blocks purchase orders.
– Vendor evaluation helps in identifying the most appropriate vendor based on prices, past performance history etc.
These are only examples of the value addition a BPX can give. Understanding the power of a specific SAP functionality and communicating the benefits to organizations is crucial for the success of an SAP implementation. Due to the sheer size of SAP as a product, with diverse functionalities, it becomes increasingly difficult for organizations to comprehend the benefits that can be derived. I do believe that it is the role of the BPXer to fill this gap and explain to the organization how their business processes can be made efficient and effective.
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